Systems and methods for cash based accounting in a general ledger

ABSTRACT

Systems and methods are disclosed for facilitating cash based accounting. In one exemplary embodiment, there is provided a method that includes, for example, providing a cash ledger. The cash ledger may contain at least one line item and a clearing account. The method may include posting a payment, which contains at least one line item, to a bank account and clearing a business partner account by posting the payment against the business partner account. The method may also include determining a revenue account from the cleared business partner account and clearing the at least one line item in the payment.

TECHNICAL FIELD

The present invention generally relates to the field of data processingand to financial systems and methods for balancing payments. Moreparticularly, and without limitation, the invention relates to computersystems and methods for providing a cash ledger for a retrospectiveprojection of payments along a process chain.

BACKGROUND INFORMATION

Cash accounting is required by most public and private sectororganizations. Furthermore, most organizations have to report a full setof financial statements.

Today, many corporate groups and other organizations must comply with aplurality of statutory accounting principles when preparing andpublishing their annual financial statements. For example, a Germangroup listed on a U.S. stock exchange must submit a financial statementunder US-GAAP and/or IAS as well as under HGB. It is possible thatfurther financial statements are necessary, for example, forsubsidiaries in Asian countries, according to local rules.

In addition to these financial statements prescribed by law, thepreparation of financial statements for various organizational units ofan enterprise that are as informative as possible are required forinternal uses. For example, such financial statements provide managementwith as comprehensive a picture as possible on the development ofindividual projects or company segments or product groups. Theorganizational units of an enterprise may be cost centers, profitcenters, or segments or lines of business. In the media industry, suchan organizational unit may, for example, involve a single title or, inthe insurance industry, a single type or line of insurance business.

All company reports of a corporate entity are based on businesstransactions, each of which is to be recorded by a document. Forexample, a business transaction may be recorded by an incoming supplierinvoice or the withdrawal of goods from the stores for productionpurposes. Large corporate entities incur thousands or hundreds ofthousands of transactions each day. For that reason, accounting for alarge corporate entity can be accomplished only with the use of dataprocessing systems if related efforts are to be justifiable.

In view of the foregoing, corporate entities and other organizationsrequire improved data processing systems and methods that provide asummarized reporting of their cash flow, so that they can view moneypaid and money received. Such systems and methods must be capable ofproviding relevant balance and other accounting information, even forentities that incur a large number of daily transactions. Therefore,there is thus a need to provide an improved accounting tool tofacilitate a retrospective projection of information along a processchain.

SUMMARY

Embodiments of the present invention encompass methods, apparatus, andcomputer program products for cash based accounting. Embodiments of theinvention may facilitate, for example, a retrospective projection ofinformation along a process chain.

In one exemplary embodiment, there is provided a computer-readablemedium containing instructions to configure a processor to perform amethod for facilitating cash based accounting. The method may include,for example, providing a cash ledger. The cash ledger may contain atleast one line item and a clearing account. The method may includeposting a payment, which contains at least one line item, to a bankaccount and clearing a business partner account by posting the paymentagainst the business partner account. The method may also includedetermining a revenue account from the cleared business partner accountand clearing the at least one line item in the payment.

In another exemplary embodiment, there is provided a computerized systemfor facilitating cash based accounting. The system comprises, forexample, a processor and a memory, wherein the processor and the memoryare configured to perform a method. The method may include, for example,providing a cash ledger. The cash ledger may contain at least one lineitem and a clearing account. The method may include posting a payment,which contains at least one line item, to a bank account and clearing abusiness partner account by posting the payment against the businesspartner account. The method may also include determining a revenueaccount from the cleared business partner account and clearing the atleast one line item in the payment.

In another exemplary embodiment, there is provided a method forfacilitating cash based accounting. The method may include, for example,providing a cash ledger. The cash ledger may contain at least one lineitem and a clearing account. The method may include posting a payment,which contains at least one line item, to a bank account and clearing abusiness partner account by posting the payment against the businesspartner account. The method may also include determining a revenueaccount from the cleared business partner account and clearing the atleast one line item in the payment.

It is to be understood that both the foregoing general description andthe following detailed description are exemplary and explanatory onlyand are not restrictive of the invention, as described. Further featuresand/or variations may be provided in addition to those set forth herein.For example, the present invention may be directed to variouscombinations and subcombinations of the disclosed features and/orcombinations and subcombinations of several further features disclosedbelow in the detailed description.

BRIEF DESCRIPTION OF THE DRAWINGS

The accompanying drawings, which are incorporated in and constitute apart of this specification, show certain aspects of implementationsconsistent with the present invention and, together with thedescription, help explain some of the principles associated with theinvention. In the drawings,

FIG. 1 illustrates a block diagram of an exemplary system environment,consistent with certain aspects related to the present invention;

FIG. 2 depicts another block diagram of an exemplary Enterprise ResourcePlanning (“ERP”) system, consistent with certain aspects related to thepresent invention;

FIG. 3 depicts an exemplary screenshot of a payment on account,consistent with certain aspects related to the present invention; and

FIG. 4 depicts an exemplary flow diagram that illustrates clearing apayment, consistent with certain aspects related to the presentinvention.

DETAILED DESCRIPTION

The following detailed description refers to the accompanying drawings.Wherever possible, the same reference numbers are used in the drawingsand the following description to refer to the same or similar parts.While several exemplary embodiments and features of the invention aredescribed herein, modifications, adaptations and other implementationsare possible, without departing from the spirit and scope of theinvention. For example, substitutions, additions or modifications may bemade to the components illustrated in the drawings, and the exemplarymethods described herein may be modified by substituting, reordering oradding steps to the disclosed methods. Accordingly, the followingdetailed description does not limit the invention. Instead, the properscope of the invention is defined by the appended claims.

FIG. 1 illustrates a block diagram of an exemplary system environment100, consistent with certain aspects related to the present invention.Referring to FIG. 1, system 100 includes a client system 110 connectedto a server system 140 by a network 130. The client system includes auser interface 120, and the server system 140 includes an ERP system150. Although the description of system 100 is made in the context of aclient-server environment, other system environments and arrangementscan be used instead. Further, although reference is made to ERP systems150 in describing embodiments of the invention, other types of businessor financial system applications may be employed alone or in anysuitable combination.

The client system 110 may include one or more processors, such as acomputer, to interface with server system 140. Server 140 may includeone or more processors, such as computers. User interface 120 mayprovide an interface to allow a user to interact with otherapplications, such as allowing the user to instantiate applications onserver system 140. User interface 120 may be implemented as a graphicaluser interface for receiving information from ERP system 150. By way ofan example, a Web browser may be used as user interface 120. As usedherein, the term “instantiate” means, in an object oriented programmingenvironment, an object of a particular class, and, more generally,includes deploying, customizing, running and/or executing anapplication.

A computer suitable for use as a client or a server includes, amongother things, a processor for executing instructions and one or morememory devices for storing computer program instructions and data. Thecomputer may also receive data from and/or transfer data to one or moremass storage devices for storing data, e.g., magnetic, magneto opticaldisks, or optical disks. Furthermore, the computer may be capable ofinterfacing to a network, such as network 130.

Network 130 may include, alone or in any suitable combination, atelephony-based network, a local area network (LAN), a wide area network(WAN), a dedicated intranet, a wireless LAN, the Internet, a wirelessnetwork, a bus, and/or any other any communication mechanisms. Further,any suitable combination of wired and/or wireless components and systemsmay be used to provide a communication mechanism. Moreover, network 130may be embodied using bi-directional or unidirectional communicationlinks. Further, network 130 may utilize one or more protocols such asTransmission Control Protocol/Internet Protocol (TCP/IP), Hyper TextTransfer Protocol (HTTP), SOAP (Simple Object Access Protocol), andRemote Procedure Call (RPC).

FIG. 2 illustrates a detailed exemplary embodiment of ERP system 150. Asshown in FIG. 2, ERP system 150 may include a computing infrastructure210, an accounting interface 220, and one or more modules 230.

Computing infrastructure 210 may include one or more servers and storagedevices. The servers and storage devices may be collocated with eachother or may be distributed across multiple locations.

Accounting interface 220 may reside on computing infrastructure 210 andprovide the foundation for collecting accounting information. Suchinformation may include accounts payable and accounts receivable.Accounting interface 220 may enable an organization to utilize the largeamount of data amassed and needed to conduct operations by providing acentralized source for collecting, interpreting, consolidating, andredistributing data that arrives from a variety of systems. Accountinginterface 220 may ensure that all accounts are balanced according topreconfigured rules. There are several ways that accounts may bebalanced. They may be balanced by segment (such as a branch of anorganization, including, for example, licensing, consulting, andtraining), profit center (such as a regional office or group within theoffice), business area, and fund, for example.

Module 230 may comprise one or more software packages that are dedicatedto specific operation tasks. For example, module 230 may include generalledger 231, cash ledger 232, and reporting 233.

General ledger 231 may provide the basis for external reporting ofinformation. General ledger 231 may keep track of the income, balancesheets, and transactions that affect an income statement. General ledger231 may provide balance sheets, income statements, and cash flow so thatusers can view how money is received and spent.

General ledger 231 and cash ledger 232 may receive all of theinformation from accounting interface 220. Cash ledger 232 may be acomplete, balanced set of accounts required by and maintained for cashbasis accounting. Normally, all cash relevant business processes arerecorded, or posted, in cash ledger 232. The postings may contain thecash account and the revenue/expense account. In addition, cashtransfers from one revenue/expense account to another revenue/expenseaccount (e.g., a new invoice reference for the partial payment orclearing of a payment on an account with an invoice) may be updated incash ledger 232. Cash ledger 232 may realize both revenue and expense atthe time cash is paid or received. Most of the postings to cash ledger232 may be cash against revenue/expense postings.

Cash ledger 232 may be also be viewed as part of general ledger 231.Cash ledger 232 may be a non-leading ledger in the general ledgerenvironment. To enable the reporting of cash information using accountassignments, a new dimension within cash ledger 232 may be defined. Thisdimension is referred to herein as a revenue/expense account(RE_ACCOUNT). The RE_ACCOUNT may be populated with the values of therevenue accounts and expense accounts.

In addition to the RE_ACCOUNT, an additional dimension may be defined tomemorize bank account information along a process chain. This dimensionis referred to herein as a cash account (CASH_ACCOUNT). CASH_ACCOUNT maybe populated with bank account information that may be contained in anoriginal payment document.

Reporting 233 may obtain the balanced accounts from general ledger 231and cash ledger 232 and report those results to the user. A user mayobtain and view the results at user interface 120.

FIG. 3 illustrates an exemplary screenshot 300 of a payment on anaccount contained within a cash ledger document. The tables 310, 320,330, 340 shown in FIG. 3 may be displayed separately or in anycombination on user interface 120. Certain information within each ofthe tables may only be available depending on the status of the progressof the process chain. The name of the account within general ledger 231may be shown in the “GL account” column. Further, in certainembodiments, the “Substitution for cash ledger” column is not displayed.In the embodiment of FIG. 3, the “Substitution for cash ledger” columnis inserted to illustrate the logical replacement of the content of the“GL account” column by that of other columns, such as the “CASH_ACCOUNT”column which is explained below.

The value of the payment depicted in the bank statement may be shown inthe “Amount” column. The “CASH_ACCOUNT” column may represent a physicalcolumn to store “GL account” information which is to be inherited alongclearing chains. In certain embodiments, the “CASH_ACCOUNT” column mayremain hidden to the user and not be offered on the user interface.

The variable corresponding to the RE_ACCOUNT may be shown in the“RE_ACCOUNT” column. In addition, a variable or identifier correspondingto the segment, profit center, business area, and/or fund associatedwith the payment may be depicted in the “Segment/Profit Center/BusinessArea/Fund” column.

In box 310, information concerning a bank statement is provided which isrelated to a payment on account. In this example, the payment is EUR 10.This is an exemplary embodiment, and many different payment values maybe received and cleared as shown in FIG. 3. In this example, no invoicereference is available, therefore the payment cannot be directlyassigned to the corresponding account (e.g., segment, profit center,business area, or fund). Because the corresponding account is not knownat this time, a variable “Dummy” is placed within the “Segment/ProfitCenter/Business Area/Fund” column.

Even though the corresponding “Segment/Profit Center/Business Area/Fund”account is unknown, the payment may be updated within cash ledger 232.Therefore, variable “Bank,” which may indicate the specific bank accountthat received the payment, is placed within the column CASH_ACCOUNT. Inaddition, variable “Advance” is placed within the column RE_ACCOUNT.Variable “Advance,” which may represent a default value for theRE_ACCOUNT, is not specified at this time.

In the example of FIG. 3, the payment amount of EUR 10 in box 310 may beviewed as a debit, therefore a debit of EUR 10 is associated with the GLaccount “Bank” and cash ledger account “Bank,” This results in a balanceamounting to EUR 10 on the credit side of the GL account “Bank clearing”and cash ledger account “Advance.” Because a payment of EUR 10 is postedto the bank account “Bank,” the cash ledger is updated.

Box 320 depicts an invoice that may be generated and sent to a businesspartner. This invoice may correspond to payment that a business partnerowes to a particular account (e.g., segment, profit center, businessarea, or fund) based on goods or services that the business partnerreceived. In box 320, no payment is received, therefore cash ledger 232is not updated at this time.

In box 320, the invoice may be associated with a particular businesspartner as shown with the GL account “Business Partner.” In thisexample, the invoice is for EUR 10 and may be viewed as a debit from“Business Partner” and a corresponding credit to the associated GLaccount “Revenue/Expense.” The invoice may contain the RE_ACCOUNT,therefore the RE_ACCOUNT column is updated to reflect this information.In this example, the RE_ACCOUNT is “Revenue/Expense.” In addition, theappropriate account (e.g., segment, profit center, business area, orfund) that is sending the invoice for payment is known. Therefore, the“Segment/Profit Center/Business Area/Fund” column may reflect theappropriate account, which is account “A.”

In box 330, a payment on an account may be received from the businesspartner. The payment may be viewed as a credit of EUR 10 to the GLaccount “Business Partner” and a corresponding debit of EUR 10 to the GLaccount “Bank Clearing,” Consistent with box 320, the RE_ACCOUNT and“Segment/Profit Center/Business Area/Fund” may be known, and thisinformation may be inherited from step 320. Therefore, the RE_ACCOUNT is“Revenue/Expense” and the “Segment/Profit Center/Business Area/Fund” is“A.”

In box 340, the payment on an account is cleared. In the first row, theinformation from the GL account “Bank Clearing” in box 310 may beinherited. However, the amount may be viewed as a debit of EUR 10 tobalance the credit of EUR 10 associated with the “Bank Clearing” boxstep 310. In the second row, the information from the GL account “BankClearing” in box 330 may also be inherited. However, the amount may beviewed as a credit of EUR 10 to balance the debit of EUR 10 associatedwith the “Bank Clearing” from box 330. At this time, the EUR 10 paymentmay be cleared by the GL account “Bank Clearing,” and the original EUR10 payment reflected on the bank statement is associated with theRE_ACCOUNT “revenue/expense” and “Segment/Profit Center/BusinessArea/Fund” “A.”

In the third row, the information from the GL account “Bank” in box 310may be inherited. However, the amount may be viewed as a credit of EUR10 to balance the debit of EUR 10 associated with the “Bank” from box310. In addition, a pre-defined clearing GL account is used to storeclearing items, which are created automatically to ensure a documentwhich is overall balanced by entity (i.e. Segment, Profit Center,Business Area or Fund). In this example, the GL account is named“Zero-Balance Clearing Account.”

In the fourth row, the information from the GL account “Revenue/Expense”in box 320 may be inherited. However, the amount may be viewed as adebit of EUR 10 to balance the credit of EUR 10 associated with the“Revenue/Expense” from box 320. In addition, a different GL account maybe may be used. In this example, the GL account is also “Zero-BalanceClearing Account.” The “Substitution for cash ledger” column illustratesthat the values within the GL account column should be substituted.Specifically, the “Zero-Balance Clearing Account” value is substitutedwith the “bank” value. The RE_ACCOUNT is “revenue/expense.” At thistime, the payment of EUR 10 has been cleared by GL account “BankClearing,” which may result in a balance in cash ledger account “Bank.”

FIG. 4 depicts an exemplary flow diagram 400 that illustrates clearing apayment on an account. In step 410, an incoming payment on an account ofEUR 10 is reflected on the bank statement as a debit of EUR 10. At thistime, the corresponding account (e.g., segment, profit center, businessarea, or fund) is not known, therefore a variable “Dummy” is associatedwith the payment on account. Because the payment must balance, acorresponding credit of EUR 10 may be reflected as a credit on the bankclearing. The credit of EUR 10 may also inherit the variable “Dummy.”

In step 420, a business partner invoice may be generated for EUR 10. Atthis time, the corresponding account is known, and be referred to as“A.” This may result in a debit of EUR 10 in a receivables accountbecause the invoice has not been paid. This may also result in a creditof EUR 10 in a revenue account because payment is expected.

In step 430, a payment of EUR 10 corresponding to the invoice in step320 may be received. Because the payment corresponds to the invoice, thecorresponding account “A” may be inherited from the invoice. Whenpayment is received, a credit of EUR 10 may be reflected in thereceivables account. Because the EUR 10 payment must balance, a debit ofEUR 10 may be reflected in the bank clearing.

At this time, the bank clearing is balanced. The bank clearing mayreflect a debit of EUR 10 corresponding to account “Dummy” and a creditof EUR 10 corresponding to account “A” as shown in step 440.

Also in step 440, a clearing account may reflect the debit of EUR 10corresponding to account “Dummy” as a credit and the credit of EUR 10corresponding to account “A” as a debit. The debit side and credit sideof the clearing are balanced, therefore the payment may be cleared. Theclearing account, however, is replaced by the bank account(automatically or “on the fly”) by the retrospective projectionmechanism explained in FIG. 3. Because the payment must balance, the EUR10 payment corresponding to account “Dummy” may now be viewed as acredit on the bank account. The payment is now cleared, and the bankaccount may reflect the EUR 10 payment as corresponding to account “A.”

The foregoing description has been presented for purposes ofillustration. It is not exhaustive and does not limit the invention tothe precise forms or embodiments disclosed. Modifications andadaptations of the invention will be apparent to those skilled in theart from consideration of the specification and practice of thedisclosed embodiments of the invention. For example, the describedimplementations include software, but systems and methods consistentwith the present invention may be implemented as a combination ofhardware and software or in hardware alone. Examples of hardware includecomputing or processing systems, including personal computers, servers,laptops, mainframes, micro-processors and the like. Additionally,although aspects of the invention are described for being stared inmemory, one skilled in the art will appreciate that these aspects canalso be stored on other types of computer-readable media, such assecondary storage devices, for example, hard disks, floppy disks, orCD-ROM, the Internet or other propagation medium, or other forms of RAMor ROM.

Computer programs based on the written description and methods of thisinvention are within the skill of an experienced developer. The variousprograms or program modules can be created using any of the techniquesknown to one skilled in the art or can be designed in connection withexisting software. For example, program sections or program modules canbe designed in or by means of Java, C++, HTML, XML, or HTML withincluded Java applets or in SAP R/3 or ABAP. One or more of suchsoftware sections or modules can be integrated into a computer system orexisting e-mail or browser software.

Moreover, while illustrative embodiments of the invention have beendescribed herein, the scope of the invention includes any and allembodiments having equivalent elements, modifications, omissions,combinations (e.g., of aspects across various embodiments), adaptationsand/or alterations as would be appreciated by those in the art based onthe present disclosure. The limitations in the claims are to beinterpreted broadly based on the language employed in the claims and notlimited to examples described in the present specification or during theprosecution of the application, which examples are to be construed asnon—exclusive. Further, the steps of the disclosed methods may bemodified in any manner, including by reordering steps and/or insertingor deleting steps, without departing from the principles of theinvention. It is intended, therefore, that the specification andexamples be considered as exemplary only, with a true scope and spiritof the invention being indicated by the following claims and their fullscope of equivalents.

1.-18. (canceled)
 19. A non-transitory computer-readable storage mediumstoring computer-executable instructions, which, when executed by aprocessor, cause the processor to perform a method for cash-basedaccounting for an entity, the method comprising: recording an incomingpayment on a bank statement as a debit of a specific amount for anunknown account; associating a dummy identifier with the incomingpayment; generating a business partner invoice for the specific amount,the business partner invoice having an account identifier; receiving,from a business partner, a cash payment of the specific amountcorresponding to the business partner invoice; balancing a bank clearingsheet based on the debit of the specific amount corresponding to thedummy identifier and a credit of the specific amount corresponding tothe account identifier; and inserting, in a clearing account, the debitof the specific amount corresponding to the dummy identifier as a creditand the credit of the specific amount corresponding to the accountidentifier as a debit.
 20. The non-transitory computer-readable mediumof claim 19, wherein the method further comprises: inserting the creditof the specific amount on the bank clearing sheet corresponding to thedebit of the specific amount on the bank statement.
 21. Thenon-transitory computer-readable medium of claim 19, wherein the methodfurther comprises: inserting the debit of the specific amount in areceivable account indicating the cash payment owned by the businesspartner; and inserting the credit of the specific amount in a revenueaccount indicating the cash payment expected from the business partner.22. The non-transitory computer-readable medium of claim 19, wherein themethod further comprises: associating the cash payment with the accountidentifier; and inserting, according to the cash payment, the credit ofthe specific amount in the receivable account and the debit of thespecific amount in the bank clearing sheet.
 23. The non-transitorycomputer-readable medium of claim 19, wherein the method furthercomprises clearing the cash payment based on the clearing account. 24.The non-transitory computer-readable medium of claim 19, wherein themethod further comprises replacing the clearing account with a bankaccount by a retrospective projection mechanism.
 25. The non-transitorycomputer-readable medium of claim 24, wherein the bank accountassociating the cash payment with the account identifier.
 26. A methodfor cash-based accounting for an entity, comprising: recording anincoming payment on a bank statement as a debit of a specific amount foran unknown account; associating a dummy identifier with the incomingpayment; generating a business partner invoice for the specific amount,the business partner invoice having an account identifier; receiving,from a business partner, a cash payment of the specific amountcorresponding to the business partner invoice; balancing a bank clearingsheet based on the debit of the specific amount corresponding to thedummy identifier and a credit of the specific amount corresponding tothe account identifier; and inserting, in a clearing account, the debitof the specific amount corresponding to the dummy identifier as a creditand the credit of the specific amount corresponding to the accountidentifier as a debit.
 27. The method of claim 26, further comprisinginserting the credit of the specific amount on the bank clearing sheetcorresponding to the debit of the specific amount on the bank statement.28. The method of claim 26, further comprising: inserting the debit ofthe specific amount in a receivable account indicating the cash paymentowned by the business partner; and inserting the credit of the specificamount in a revenue account indicating the cash payment expected fromthe business partner.
 29. The method of claim 26, further comprising:associating the cash payment with the account identifier; and inserting,according to the cash payment, the credit of the specific amount in thereceivable account and the debit of the specific amount in the bankclearing sheet.
 30. The method of claim 26, further comprising clearingthe cash payment based on the clearing account.
 31. The method of claim26, further comprising replacing the clearing account with a bankaccount by a retrospective projection mechanism.
 32. The method of claim31, wherein the bank account associating the cash payment with theaccount identifier.
 33. A system for cash-based accounting for anentity, comprising: a memory configured to store instructions andaccounting data; and a processor configured to execute the instructionsfor processing the accounting data, the instructions causing theprocessor to: record an incoming payment on a bank statement as a debitof a specific amount for an unknown account; associate a dummyidentifier with the incoming payment; generate a business partnerinvoice for the specific amount, the business partner invoice having anaccount identifier; receive, from a business partner, a cash payment ofthe specific amount corresponding to the business partner invoice;balance a bank clearing sheet based on the debit of the specific amountcorresponding to the dummy identifier and a credit of the specificamount corresponding to the account identifier; and insert in a clearingaccount, the debit of the specific amount corresponding to the dummyidentifier as a credit and the credit of the specific amountcorresponding to the account identifier as a debit.
 34. The system ofclaim 33, wherein the instructions further cause the processor to:insert the debit of the specific amount in a receivable accountindicating the cash payment owned by the business partner; and insertthe credit of the specific amount in a revenue account indicating thecash payment expected from the business partner.
 35. The system of claim33, wherein the instructions further cause the processor to: associatethe cash payment with the account identifier; and insert, according tothe cash payment, the credit of the specific amount in the receivableaccount and the debit of the specific amount in the bank clearing sheet.36. The system of claim 33, wherein the instructions further cause theprocessor to clear the cash payment based on the clearing account. 37.The system of claim 33, wherein the instructions further cause theprocessor to replace the clearing account with a bank account by aretrospective projection mechanism.
 38. The system of claim 37, whereinthe bank account associating the cash payment with the accountidentifier.